Preparing rural health providers for future transformations: administrative and financial efficiency

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As health care rapidly evolves, even rural hospitals on sound financial and operational footing will have trouble keeping up. Traditional ways of managing administrative and financial functions will not be sustainable in the long run. To keep up with the complex environment — and quite frankly to survive and continue serving their communities — rural hospitals must embrace change. Health care is going to continue to evolve, and large systems will adopt new technologies and be ready. Rural providers will struggle to keep up unless they make a proactive decision to optimize their operations, bringing both value and efficiency to their administrative and financial functions.

Balancing efficiency and effectiveness

Jonathan Miller, CPA
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There is no trade-off between efficiency and effectiveness; in fact, they go hand in hand. Becoming more efficient through reducing costs while adding value is crucial. By automating transactional activities and adopting a forward-thinking approach, rural providers can achieve both. Competitors are already doing this, and the risk of not following suit is being left behind. Embracing these changes is essential for rural providers to remain competitive and sustainable in the evolving health care landscape.

Solutions to reduce and remove transactional activities

Common manual transactions at rural health providers include invoice processing, payroll calculations, expense report handling, bank reconciliations, procurement and purchase order management, medical billing and coding and financial reporting.

Many rural health providers already possess general ledger software with built-in automation capabilities. However, these features often remain underutilized. Enhancing existing software functionalities or integrating additional software solutions can be a straightforward process that delivers substantial benefits. By automating these routine transactions, rural health finance departments can significantly reduce workload and minimize errors.

In addition to automation, outsourcing non-value-added activities or collaborating with other providers can further streamline operations. By reallocating these tasks, finance departments can free up their staff to focus on strategic, value-added activities that drive organizational growth and efficiency. These strategies not only enhance productivity but also position rural health providers to keep pace with industry advancements and maintain a competitive edge.

Most competitors and large health systems have already automated these transactional activities. They have moved on to leveraging advanced data analytics, AI, and other innovative technologies to further enhance their operations.

Shifting focus from historical to forward-thinking

Shifting focus from historical to forward-thinking means moving away from simply recording and analyzing past data to proactively using data and technology to predict future trends and make informed decisions. This involves leveraging predictive analytics, real-time data monitoring, and advanced decision support systems to anticipate and respond to future challenges.

• Predictive analytics: Use tools that analyze past data to forecast future trends.
• Real-time data monitoring: Implement systems to provide up-to-date data on key performance indicators.
• Decision support systems: Utilize advanced systems that provide actionable insights based on data analysis.

By shifting focus from historical to forward-thinking, rural health providers can make proactive decisions that enhance patient outcomes, optimize operations, and ensure long-term sustainability.

Investing in reskilling and development

There are understandable concerns about job security, changing roles, and the ability to adapt to new technologies. These concerns are valid with the uncertainty that comes with change. However, for rural hospitals to remain autonomous and continue making local decisions that best serve their community, they must embrace these changes.

By focusing on the human side of change and investing in the development and reskilling of their staff, they can create a more adaptable, motivated, and skilled workforce. This approach will help them navigate the evolving health care landscape while maintaining our autonomy and local decision-making power. Providing opportunities for professional growth can improve job satisfaction and retention, reducing turnover and maintaining a skilled workforce. Employees will feel more engaged and valued, leading to a more motivated team.

It's essential to clearly communicate the reasons for these changes. The primary goal is to enhance operations so rural hospitals can continue to provide high-quality care while remaining financially stable and autonomous. Emphasizing that these changes will allow the hospitals to maintain local decision-making power is crucial.

A skilled and adaptable workforce can better support the organization’s strategic goals, leading to improved patient care, operational efficiency, and financial performance. This ensures that the hospital can continue to serve the community effectively. Equipping employees with new skills and knowledge prepares them for future challenges and opportunities. This not only benefits the hospital, but also ensures the long-term employability and career success of their staff.

Adopting IT policies and security measures

As rural health providers adopt new technologies and leverage data to improve operational efficiency and patient care, robust information technology (IT) policies and security measures become increasingly critical. The influx of electronic health records, telehealth services, and predictive analytics necessitates a comprehensive approach to data protection and cybersecurity.

To fully capitalize on the benefits of these advancements, it is imperative to build and enforce robust IT policies and security protocols. Without these measures, investments in technology and staff development are at risk, and the potential for data breaches and cyber threats increases significantly.

Investments will need to be made in:

1. Building comprehensive information technology policies to safeguard sensitive information and ensure the continuity of services.

2. Investing in advanced cybersecurity measures that includes implementing encryption, multi-factor authentication, and regular security audits.

3. Ensuring compliance with health care regulations.

4. Continuous improvement and adaption to stay ahead of the threats and technology.

In the rapidly evolving landscape of health care, rural health providers face unique challenges that require proactive and strategic approaches to remain competitive and sustainable. The need to streamline administrative and financial functions, invest in staff development, and ensure robust IT policies and security measures is paramount.

As a partner with The Bonadio Group’s Assurance Division, Jonathan Miller’s primary role is overseeing the financial statement audits of his team’s clients. He is also involved in a variety of consulting engagements, including financial due diligence and forecasting, project management and advisory services, operational audits, business planning, and board governance.